BUCKHANNON – The City of Buckhannon has begun the process of increasing water rates by 25% for municipal customers and 42% resale customers.
Buckhannon residents will have the opportunity to voice their opinions regarding Ordinance No. 451 during a public hearing which will be held at Buckhannon City Hall at 7 p.m. on June 3. City council discussed the water board’s proposal recommending the water rate hikes at their regular meeting Thursday, May 6.
According to the proposal, the City of Buckhannon has not sought a water rate increase since 2016 and the cost of providing water distribution services has increased substantially over the past five years. The proposed ordinance also says the city’s opportunities to improve and maintain its water distribution operations are substantially impeded given the current rates and it notes that the Public Service Commission of West Virginia has imposed new requirements on water systems related to financial reserves.
Currently, the Buckhannon municipal water system’s rates are among most affordable in West Virginia, with Buckhannon ranking 33rd out of the 367 water systems. If the proposed water rates are put into place, Buckhannon would rank the 61st least expensive.
City attorney Thomas O’Neill said Thursday’s reading was the first of three before the public hearing scheduled for June 3, 2021 at 7 p.m.
“The new rates are reflective of the rate study by Todd Dingess, Certified Public Accountant with Smith, Cochran and Hicks,” O’Neill said. “In order for the water board to break even, there is a 25 percent rate increase … The water board is operating at a deficit if this rate increase is not passed.”
Amberle Jenkins, the city’s Director of Finance and Administration, said the city is required by West Virginia State Code to contribute money to a depreciation account; with the current rates, they are not able to do so.
“We do have to contribute to this depreciation account and at the present time we cannot do so,” Jenkins told council.
Mayor Robbie Skinner said he wants to make sure folks understand that when they pay their utility bills, they are paying for water, sewage and trash collection.
“That amount goes directly to those departments,” Skinner said. “All of those monies must stay separate – you cannot take from one to give to another. When you pay your bill, it does not go into a giant pot at City Hall. Those funds stay separate and they are required to stay separate by State Code and through the Public Service Commission… We do not co-mingle funds.”
The proposed increase would be just for the water portion of the bill.
“This is specifically for the water department,” he said. “We are required to meet a certain bond requirement which we cannot meet under the current rates.”
“We have a great water plant that constantly wins awards for taste and efficiency,” Skinner added. “Kelly Arnold does a phenomenal job down there. The plant has long surpassed its usage life expectancy. We have done the right things when it comes to maintenance. We take very good care of the plant and it has lasted us far longer than it should and will continue to last us, because we continue to do the right things to keep it up and running and keep it running efficiently for our community.”
Councilman David Thomas said the water board would like to raise rates more frequently so that each increase is less substantial.
“You look at five years ago, and since then we have increased our wages per hour, chemical expenses have increased dramatically and we also have discussed shift differentials,” Thomas said.
Councilman Jack Reger said he feels the utility boards should be put on a rotation where rates are looked at every three years.
“I think if we were more systematic in our approach and rotated the utility boards it will be easier on our community,” Reger said. “Nobody wants to pay more for anything, but the reality is the city has to pay for those services. Inflation is going to be with us forever.”
If approved, the rate hike for water would be approximately 25 percent for municipal customers and approximately 42 percent for water resale customers.
Current rates are: Users of 0 to 2,000 gallons of water cost $6.51/1,000 gallons; users of 2,000 to 14,000 gallons of water pay $6.27 per/1,000 gallons; users of 14,000 to 50,000 gallons of water cost $5.62 per/1,000 gallons; and users of more than 50,000 pay $2.59/1,000 gallons.
Proposed rates are: Users of 0 to 2,000 gallons of water pay $8.14/1,000 gallons; users of 2,000 to 14,000 gallons of water pay $7.84/1,000 gallons; users of 14,000 to 50,000 gallons of water pay $7.03/1,000 gallons; and users of more than 50,000 gallons pay $3.24/gallon.
Water that is sold to resale customers currently is $1.76/1,000 gallons. If the rate hike is approved, the resale rate would be $2.50/1,000 gallons.
If the increases are approved, it is estimated they will take effect August 1, 2021.
